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Air China profit up 730pc to US$616.6 million as revenues rise 4.07pc

CHINESE flag carrier Air China's first half net profit soared 730 per cent to CNY3.94 billion (US$616.6 million), drawn on revenues of CNY51.11 billion, which increased 4.07 per cent year on year.

The good fortune was credited to lower fuel prices and strong market demand. ASK (available seat kilometres) jumped 10.47 per cent to 102.88 billion and RPK (revenue passenger kilometres) increased 9.49 per cent to 82.17 billion.

The Beijing-based carrier said fuel costs declined 5.13 billion yuan to 12.06 billion yuan in the first half of the year, accounting for about 30 per cent of its operating costs, compared with 41 per cent of the same period last year.

Air China Cargo抯 jet fuel expenses fell almost 30 per cent and accounted for 26.6 per cent of the total cost, reported Beijing-based the World Aviation Resource Net.

The carrier said all its hedging positions had expired and because of the volatility of jet fuel prices it had held off hedging for the time being.

Cargo revenue rose nine per cent to $676 million, but weak freight rates dragged down the average yield 11.5 per cent to just $0.21 for each kilometre ton flown, reported Newark's Journal of Commerce.

Most of Air China Cargo抯 revenue was from the international segment, which grew 6.4 per cent to $473 million. Domestic China trade was the fastest growing segment, up 22 per cent to $178 million, with Hong Kong Macau and Taiwan reporting an 11.6 per cent drop in revenue.

Air China Cargo said it was able to continue to optimise its route structure after completing the replacement of its fleet for US and European routes. The round-the-world route operated smoothly with a steady increase in cargo volume for the transatlantic sector.

The carrier is expanding its coverage, especially in the lucrative and growing transpacific market. Its new Shanghai-Edmonton-Dallas route will be launched September 3 and operate Tuesdays, Thursdays and Saturdays using a new Boeing 777 freighter. Flights will land at Edmonton six times a week, three from Shanghai and three from Dallas.

Parent carrier Air China said that its cargo division was "able to continue to optimise its route structure after completing the replacement of its fleet for US and European routes", reported Agence France-Presse.

It continued: "The round-the-world route operated smoothly with a steady increase in cargo volume for the US to Europe sector. We have continued to upgrade our product range by adding very competitive high value-added and transit products.

"By enhancing our sales management, we have made use of passenger-cargo combination operation to achieve complementary advantages. In the first half, Air China Cargo achieved profit of CNY108 million, representing a turnaround of CNY239 million."

Air China Cargo's current freighter fleet consistis of seven Boeing 777Fs, three Boeing 747-400Fs, and four Boeing 757-200SFs. The last B777F ordered by Air China Cargo will be delivered this year, making it the largest cargo airline in China.